Towards a Multiplying Channel Model
As Sun continues to change in order to be a more efficient company, one of the key areas of focus has been to revitalize our channel sales. Over the last two years we have made several changes to partner programs that make the selling of Sun's innovation and intellectual property more profitable for partners. These programmatic changes in conjunction with Sun's innovation-rich product line provide a compelling business model for Sun and our partners. Now, how to execute?
The Problem:
Ten years ago, selling Sun products was a much simpler proposition for both Sun sales reps and partner sales reps. The product lineup was comparatively simple. We had Solaris-based workstations, Solaris-based servers, and Sun storage products for Sun servers. The whole ecosystem was centered around Solaris running on an UltraSPARC processor.
Today, we're selling servers based on at least four very different processor architectures (UltraSPARC, SPARC64, AMD, & Intel); three operating systems (Solaris, Windows, & Linux); vendor-neutral storage products that connect to the mainframe data center, to the desk top, and everything in between; industry-leading infrastructure software for managing identities and services-oriented architecture; database software (MySQL); a host of networking products; and various services for supporting the infrastructure as well as implementing and managing it. The point in all this is: it is a lot more complex for a Sun rep, who is constantly receiving training on the new products and innovation, to sell all Sun's value today, how much more for the partner sales rep.
Ten years ago it was relatively simple for a channel partner sales rep to represent Sun's essential value proposition of scalable, powerful, Solaris-based workstations and servers. During the mid 1990s the channel was viewed as one of Sun's competitive advantages. Today, the danger and reality in most areas, is that the channel is merely fulfilling the demand driven by Sun's sales efforts. The truly partner-led sales by our traditional value-added resellers (VARs) is missing the mark in packaging and selling all the innovation that Sun has to offer, without the direct involvement of the Sun sales force.
With Sun's current restructuring and near term reduction in force in the sales force, understanding how to build a multiplying partner sales model is more important than ever.
Here are two short stories that illustrate what we need. Within a two-week period last Summer, there were two separate events that point out the differences between a partner sales rep who is a force multiplier and a partner sales rep that is only additive.
In one event, a customer was moving an application off the mainframe and off a mainframe database due to costs. The application owner was explaining his strategy to one of our partner sales reps; no Sun sales rep was present. The customer outlined the project and the projected costs for rehosting the application on a commercially available database and commodity servers. His total budget was about $1.2M, with over $800K budgeted for the database and $200K budgeted for servers and $200K budgeted for services. The Sun partner rep suggested mentioned that Sun had purchased MySQL and that the customer potentially reduce the overall budget to under $500K by using MySQL instead of the commercial database, if MySQL could meet the requirements. This partner rep was representing the whole value proposition that Sun could bring to the customer with their current project, looking not just at the servers, but also at how the customer could significantly reduce the overall costs by using a database that had 90% of the functionality of the commercial database, but at 10% of the cost.
In the other event, I was eating lunch with one of my sales reps and the CIO of a customer in which we have had a partner-led sales model for many years. They have been a good customer to both Sun and the partner. They too were moving an application off their mainframe and looking to rehost it on a commercially available database and Sun servers. We asked if he considered MySQL in his strategy because it would significantly reduce his costs. Although Sun had acquired MySQL about a year before this lunch, he was not aware of that fact even though our other partner met with him and his staff on a regular basis and was well aware of the project to move the application off the mainframe.
The solution:
Historically we refer to the channel partners as “Value-Added Resellers” (VARs). But what we need, in military terminology, is a force multiplier, not something additive. Too often, it's a four-legged sales call with the Sun Rep and the channel partner.
This FY our team did a “can't see the forest for the trees” session. What we did was try to throw out convention – not plan for goal, but look beyond that and think as though we were running our own business. If I was running my own business, I would not be satisfied with growing 5% or 10% or even 25%; I would want to develop a plan to double in two years – to multiply. If we were going to see different results, we were going to have to do something different. The two events that had recently happened, revealed what we viewed was a weakness in our channel. The channel was too additive in nature – it required our consistent involvement driving the value proposition with customers while the partner primarily fulfilled the demand we were driving. We didn't see partner reps in general, being equipped to articulate Sun's value proposition. It was not that the partner sales reps were not effective sales professionals or that they were not diligent in servicing our mutual customers; the problem was they were not equipped and knowing and selling Sun's broad range of IP was complex.
The solution has three aspects: Sun sales rep to partner sales rep mentoring; recruiting partners with multiplying reps or the willingness to hire them to the region; and general focus on partner training.
From the sales rep level, my reps had little they could do from a partner management perspective, but they did have influence and leverage at the Sun sales rep to partner sales rep level. We developed a mentoring model where each Sun territory rep would list two candidates for developing into a multiplying partner rep, and part of the overall territory plan would involve mentoring these partner reps on the various Sun technologies and around account and opportunity planning. My reps reached out to the partner reps who they identified as good candidate, and committed to meet with them at least biweekly, to go over accounts, opportunities, and technologies. The goal was that we would effectively have grown our sales coverage in the general territory by 150% by the end of the fiscal year. We have four general territory reps, so we have a specific objective of having at least six multiplying partner sales reps by the end of the fiscal year.
From my perspective, I committed to working with partner management in explaining our strategy, and working with them to set expectations with existing partner sales reps and to recruit partner reps who already had a strong Sun background. It has been something I've explained in all my meetings with partner management this fiscal year.
How are we doing? When we started the year, the team was all agreed that we had only one truly multiplying partner sales rep in the whole region. There were several strong candidates that had strong background in one or two areas of Sun's IP, but really only one that could really broadly represent Sun's IP and qualify opportunities across all the product lines on the same par as a Sun sales rep. At the close of our third quarter of the fiscal year, we have achieved our goal of having six partner reps that we feel are truly multiplying partner reps. Two of these were developed through mentoring and teaming over the course of the three quarters. An additional three were new hires by partners of existing sales reps who already had an in depth knowledge of Sun, one of them a former Sun sales rep. In addition to these six multiplying partner sales reps, we have four more who we have identified as being strong candidates, in other words, they have the right commitment to learn and know at least one of our product areas well, we just need to get them additional training and mentoring.
My effective territory sales force has more than doubled as we begin to close out our fiscal year. Interestingly, we are having one of the strongest Q3's in the last three years, even with the current economic conditions. And the strength of the quarter is not at all in our traditional, heavy, direct accounts. They are having one of the worst quarters (and fiscal years) due to the down economy.
Multiplication generally takes longer to get going to see results, but in the long run the results are generally much stronger.
To summarize our strategy for building a multiplying partner sales force:
(1)Develop the willing. The one-on-one sales rep focus should be on: account planning, opportunity management, demand generation/field marketing activities, and continuous training.
(2)Recruit the capable. The focus of this method is to recruit partners who will hire sales reps who are already (or close to) knowledgeable and trained on Sun's products. This is surely the fastest way to build the multiplying partner community. Source for the multiplying partner reps could be former Sun reps and systems engineers.
(3)Continuous Training. The partner sales reps need constant equipping due to the complex and broad nature of Sun's IP.
Posted at 09:03AM Mar 05, 2009 by George Miller in Personal | Comments[0]